The Manufacturing Extension Partnership Program

The Manufacturing Extension Partnership

Program

Updated September 9, 2019

Congressional Research Service

https://crsreports.congress.gov

R44308

The Manufacturing Extension Partnership Program


Summary The Hollings Manufacturing Extension Partnership (MEP) program is a national network of

centers established by the Omnibus Trade and Competitiveness Act (P.L. 100-418). MEP centers

provide custom services to small and medium-sized manufacturers (SMMs) to improve

production processes, upgrade technological capabilities, and facilitate product innovation.

Operating under the auspices of the National Institute of Standards and Technology (NIST), the

MEP system includes centers in all 50 states and Puerto Rico.

NIST provides funding to support MEP center operations, with matching funds provided by

nonfederal sources (e.g., state governments, fees for services). Initially established with a goal of

transferring technology developed in federal laboratories to SMMs, MEP shifted its focus in the

early 1990s to responding to needs identified by SMMs, including off-the-shelf technologies and

business advice. As MEP evolved, its focus shifted to reducing manufacturing costs through lean

production, quality, and other programs targeting plant efficiencies and to increasing profitability

through growth. Current MEP efforts focus on innovation and growth strategies, cybersecurity,

commercialization, lean production, process improvements, workforce training, supply chain

optimization, and exporting.

In 2017, NIST completed a system-wide revamp of MEP to better align center funding levels with

the national distribution of manufacturing activity and to result in a single center in each state and

Puerto Rico. Other objectives included aligning center activities to the NIST MEP strategic plan;

aligning center activities with state and local strategies; providing opportunities for new

partnering arrangements; and restructuring and reinvigorating the boards of local centers.

As originally conceived, the centers were intended to become self-supporting after six years. The

original legislation provided for a 50% federal cost-share for the first three years of operation,

followed by declining levels of federal support for the final three years; federal funding after a

center’s sixth year of operation was prohibited. In 1998, Congress eliminated the prohibition on

federal funding after year six. In 2017, Congress authorized NIST to provide up to 50% of the

capital and annual operating and maintenance funds required to establish and support a center.

Previously, the federal cost-share was limited to 50% for a center’s first three years of operation,

40% in year four, and one-third in fifth and subsequent years.

The MEP program has, at times, been included in discussions surrounding termination of federal

programs that provide direct support for industry. Invoking the intent of the original legislation,

President George W. Bush proposed in his FY2009 budget to eliminate federal funding for MEP

and to provide for “the orderly change of MEP centers to a self-supporting basis.” Nevertheless,

Congress appropriated $110 million for the program. Proponents assert that SMMs play a central

role in the U.S. economy and that the MEP system provides assistance not otherwise available to

SMMs. Some opponents have asserted that such services are available from other sources and

that MEP inappropriately shifts a portion of the costs of these services to taxpayers.

Continued federal support for MEP centers remains a point of contention. In his FY2018,

FY2019, and FY2020 budgets, President Trump has sought to eliminate federal support for the

MEP program. Congress appropriated $140.0 million for MEP for FY2018 and FY2019. For

FY2020, the House-passed appropriations bill included $154.0 million for MEP; the Senate has

not yet acted.

As Congress makes appropriation decisions, it may continue to discuss support for MEP in the

context of the federal government’s role in bolstering innovation and competitiveness, and in the

context of the appropriate federal role in such activities.



Contents

Overview ......................................................................................................................................... 1

Background ..................................................................................................................................... 1

Evolution of the Program ................................................................................................................ 3

Statutory Mission and Activities ..................................................................................................... 5

MEP Organization and Structure ..................................................................................................... 6

NIST MEP ................................................................................................................................. 6 MEP Advisory Board ................................................................................................................ 8 MEP Centers ............................................................................................................................. 8

Center Selection .............................................................................................................................. 9

Criteria ...................................................................................................................................... 9 System-Wide Center Recompetition ......................................................................................... 9

Review Prior to Continued Center Funding .................................................................................... 9

Center Cost-Share and Term of Eligibility .................................................................................... 10

Current Status of Cost-Sharing and Term of Eligibility .......................................................... 10 Historical Background on Cost-Sharing and Term of Eligibility ............................................ 10

Cost-Sharing ..................................................................................................................... 10 Term of Eligibility for Funding ......................................................................................... 12

Other MEP-Related Activities ....................................................................................................... 13

Current MEP-Related Activities.............................................................................................. 13 Competitive Awards Program ........................................................................................... 13 Embedding of MEP Staff in Manufacturing USA Institutes ............................................. 16 MEP-Assisted Technology and Technical Resource (MATTR) Program ......................... 18 Value and Utility of Skill Credentials to Manufacturers and Workers .............................. 18

Completed MEP-Related Activities ........................................................................................ 19 Business-to-Business Networks ........................................................................................ 19 Make it in America Challenge .......................................................................................... 19 Advanced Manufacturing Jobs and Innovation Accelerator Challenge ............................ 20 Manufacturing Technology Acceleration Centers ............................................................. 20 Other Grants ...................................................................................................................... 21

MEP Strategic Plan ........................................................................................................................ 21

Annual Report to Congress ........................................................................................................... 22

External Reviews and Recommendations ..................................................................................... 22

MEP Advisory Board .............................................................................................................. 22 Government Accountability Office ......................................................................................... 23 Congressional Budget Office .................................................................................................. 25 National Academy of Public Administration .......................................................................... 25

Appropriations and Related Issues ................................................................................................ 26

FY2019 Appropriations and the FY2020 Request .................................................................. 26 Appropriations and Requests FY2003-FY2020 ...................................................................... 26 Use of MEP Appropriations for Center Awards ...................................................................... 28 Appropriate Role of the Federal Government ......................................................................... 29



Figures

Figure 1. MEP Organizational Chart ............................................................................................... 8

Figure 2. Manufacturing Extension Partnership Program Funding ............................................... 27

Tables

Table 1. Manufacturing Extension Partnership Program Appropriations, FY2018-FY2019 ........ 26

Table 2. Requested and Enacted Appropriations for the MEP Program ........................................ 27

Table A-1. Hollings Manufacturing Extension Partnership Centers ............................................. 30

Table B-1. NIST First-Year Center Funding Following System-Wide Recompetition ................. 34

Appendixes

Appendix A. Hollings Manufacturing Extension Partnership Centers .......................................... 30

Appendix B. Center Funding After System-Wide Competition .................................................... 34

Contacts

Author Information ........................................................................................................................ 35


Congressional Research Service 1

Overview The Hollings Manufacturing Extension Partnership (MEP), a program of the National Institute of

Standards and Technology (NIST),1 is a national network of centers that provide custom services

to small and medium-sized manufacturers (SMMs)2 to improve production processes, upgrade

technological capabilities, and facilitate product innovation.

The MEP mission is “to enhance the productivity and technological performance of U.S.

manufacturing.” The MEP program executes this mission through “state and regional centers

[that] facilitate and accelerate the transfer of manufacturing technology in partnership with

industry, universities and educational institutions, state governments, and NIST and other federal

research laboratories and agencies.”3 Funding for the MEP centers is provided on a cost-shared

basis between the federal government and nonfederal sources, including state and local

governments, and fees charged to SMMs for center services.4

The MEP program received $140.0 million for FY2019, equal to its FY2018 funding level. In his

FY2020 budget, President Trump requested no funding for MEP centers. For FY2020, the House-

passed bill (H.R. 3055) would provide $154.0 million for MEP; the Senate has not yet acted.

The MEP employed approximately 511 full time equivalent federal staff at NIST in FY2018, and

the centers have just over 1,300 field staff with technical and business expertise.5 In FY2017,

MEP completed a system-wide competition that awarded one center to each state and Puerto

Rico; previously some states had more than one MEP center.

For FY2018, NIST reported 27,707 interactions with 8,410 unique clients.6 In a survey performed

by an independent third-party for NIST MEP covering FY2018, the companies served by MEP

Centers reported $15.9 billion in new and retained sales (up 26.2% over FY2017), $1.7 billion in

cost savings and investment savings (approximately the same as in FY2017), $4.0 billion in new

client investment (up 14.3%), and creation and retention of more than 121,000 jobs (up 20.5%).7

Background In the mid-1980s, congressional debates on trade focused attention on the critical role of

technological advance in the competitiveness of individual firms and long-term national

economic growth and productivity. Reflecting these ideas, the Omnibus Trade and

1 NIST is an agency of the U.S. Department of Commerce.

2 NIST defines SMMs as manufacturers with 500 or fewer employees.

3 NIST website, Manufacturing Extension Partnership Strategic Plan, http://www.nist.gov/mep/about/strategic-

plan.cfm.

4 NIST, FY2020 Congressional Budget Justification, p. NIST-80, https://www.commerce.gov/sites/default/files/2019-

03/fy2020_nist_congressional_budget_justification.pdf.

5 Email from NIST to CRS, September 4, 2019. OMB Circular A-11 (Preparation, Submission, and Execution of the

Budget), the Office of Management and Budget defines full-time equivalent (FTE) employment as “the basic measure

of the levels of employment used in the budget. It is the total number of hours worked (or to be worked) divided by the

number of compensable hours applicable to each fiscal year.” (Source: https://www.whitehouse.gov/wp-

content/uploads/2018/06/a11.pdf.) A number of NIST employees who are not on the MEP staff provide support

services for the MEP program. The work performed by MEP staff as well as by the NIST support staff are used in

calculating the FTEs supported by MEP appropriations.

6 Telephone conversation between NIST MEP and CRS, August 14, 2019; NIST, MEP FY2018 Impacts,

https://www.nist.gov/sites/default/files/documents/2019/02/05/mep_fy_2018_impacts_508.pdf.

7 W.E. Upjohn Institute for Employment Research, The National-Level Economic Impact of the Manufacturing

Extension Partnership (MEP): Estimates for Fiscal Year 2018, May 10, 2019, http://research.upjohn.org/reports/239.



Competitiveness Act (P.L. 100-418) established a public-private program, now known as the

Hollings Manufacturing Extension Partnership, to assist U.S.-based SMMs in identifying and

adopting new technologies. The focus on SMMs derived from policymakers’ perceptions of their

contribution to job creation, innovation, and manufacturing.

Research at that time indicated that SMMs

produce 2.5 times more innovations per

employee than large firms.8 Program

advocates noted the efforts of other nations

to provide technical and business

assistance to their manufacturing

communities through the establishment of

manufacturing extension centers (see text

box, “MEP-Like Programs of Other

Countries”).

In 2016, there were 246,000 SMMs in the

United States (500 or fewer employees).

These firms accounted for 98.5% of the

nation’s manufacturing enterprises and

employed approximately 5.1 million

people in 2015, approximately 44.4% of

total U.S. manufacturing employment.9

The improved use of technology by SMMs

is seen by policymakers and business

analysts as important to the

competitiveness of American

manufacturing firms. How a product is

designed and produced often determines

costs, quality, and reliability. Lack of

attention to process technologies and

techniques may be the result of various

factors, including company finances,

insufficient information, equipment

shortages, and undervaluation of the

benefits of technology. A key purpose of the MEP program is to address these issues through

outreach and the application of expertise, technologies, and knowledge.

NIST requires regular reporting by the centers, including the number and types of projects

completed. According to NIST, from MEP’s inception through FY2018, the program has worked

with 102,443 manufacturers, leading to $127.3 billion in sales and $20.5 billion in cost savings,

and has helped create and retain more than 1.1 million jobs.10

8 John Bulloch, “Accommodating the Future,” Journal of Small Business and Entrepreneurship, vol. 5, no. 2 (Fall

1987), p. 8.

9 Department of Commerce, Census Bureau, 2016 SUSB Annual Data Tables by Establishment Industry, accessed

August 20, 2019, https://www2.census.gov/programs-surveys/susb/tables/2016/us_6digitnaics_2016.xlsx?#.

10 Email from NIST to CRS, September 4, 2019.

MEP-Like Programs of Other Countries

Several other countries also have national networks of

centers that provide technical and business support to

small and medium-sized manufacturers. For example:

Germany’s Fraunhofer Institutes received

approximately €947 million (approximately $1.1

billion) in funding from German federal and state

governments in 2018 for contract research (€763

million), defense research (€60million), and

infrastructure (€124 million). Additional public funds

are provided for publicly financed research projects.

Fraunhofer has 72 institutes and research units and

more than 26,600 staff.

Japan’s Kohsetsushi network received $2.140 billion in

2012 and has 182 centers and 6,000 technical staff.

Canada’s Industrial Research Assistance Program

(IRAP) received $269 million (Canadian,

approximately $207 million (U.S.)) in government

funding in 2017. IRAP has more than 130 offices and

more than 250 field staff.

Like the MEP, the Fraunhofer Institutes and at least some

of the Kohsetsushi centers charge clients fees for their

services; IRAP does not charge clients.

Sources: U.S. Government Accountability Office, Global

Manufacturing: Foreign Government Programs Differ in Some

Key Respects From Those in the United States, GAO-13-365,

July 2013; Fraunhofer, Annual Report 2018: 70 Years of

Fraunhofer, 70 Years of Future; National Research Council of

Canada, “Industrial Research Assistance Program,”

accessed August 20, 2019. CRS requested more current

information on the Kohsetsushi network from the Embassy

of Japan, but the embassy was unable to provide

comparable data.



According to NIST MEP, for every dollar of federal investment in FY2018, the MEP generated

nearly $31.00 in new client investment and $29.50 in new sales growth for SMMs. NIST asserts

that MEP creates or retains one manufacturing job for every $1,065 in federal investment.11

A 2019 study performed by the W.E. Upjohn Institute for Employment Research using a

constrained model (which assumes competition or displacement between firms), estimated that

the services and activities of the MEP center added nearly 237,000 jobs to the U.S. economy and

$24.9 billion to GDP, producing a return of investment of 14.4:1, based on survey data provided

by MEP clients.12

Evolution of the Program The MEP program was originally established in 1988 as the “Regional Centers for the Transfer of

Manufacturing Technology.”13 Over time, the program was referred to by a number of different

names, including the Manufacturing Technology Centers program and the Manufacturing

Extension Partnership program. The America COMPETES Reauthorization of 2010 codified the

name of the program as the “Hollings Manufacturing Extension Partnership” and the centers as

the “Hollings Manufacturing Extension Centers.”14

From its inception through the mid-1990s, the MEP’s principal emphasis was on

establishing the national network—making sure there was a center within reach of all the

nation’s manufacturers and linking those centers to one another so they could learn from

and teach each other about how best to work with manufacturers.15

The first three centers were established in 1989. Four more were added in 1991 and 1992. In

1994, the number of MEP centers expanded substantially when NIST took over support of

extension centers originally funded by the Department of Defense’s Technology Reinvestment

Project. This brought the number of centers to 44. NIST awarded additional centers in 1995-1996,

increasing the total to 70 centers.16 Subsequent consolidation of centers in New York and Ohio

brought the number of centers down to 60, including centers in each state and Puerto Rico.

While the focus on helping SMMs has remained constant, the methods and tools used by MEP

have evolved since its creation. An intent of the legislation that created the manufacturing

extension effort was to provide cutting-edge technology developed by NIST and other federal

laboratories to SMMs. Royalties and licensing fees paid to the centers by the SMMs for the use of

these technologies were expected to make the centers self-sufficient after the initial six years of

11 NIST, MEP Advisory Board, 2018 Annual Report, https://www.nist.gov/document/mepadvisoryboardreport2018-

finalv5pdf.

12 Jim Robey, Randall W. Eberts, Brian Pittelko, and Claudette Robey, The National-Level Economic Impact of the

Manufacturing Extension Partnership (MEP): Estimates for Fiscal Year 2018, W.E. Upjohn Institute for Employment

Research, Kalamazoo,, MI, May 10, 2019, https://research.upjohn.org/reports/239/. Estimation for FY2018 based on all

responses using firm variables. Data based on the results of the author’s use of a constrained approach that “assumes

that competition among firms mitigates the overall effects of the estimated increase in sales and employment since

firms that do not benefit from the services rendered by MEP may lose market share to those that do, and thus grow less

quickly than they would have otherwise and perhaps even lose sales and jobs.”

13 P.L. 100-418.

14 P.L. 111-358.

15 Dave Cranmer, Reflections—Part 2, Manufacturing Innovation blog, http://nistmep.blogs.govdelivery.com/

reflections-part-2/.

16 Dave Cranmer, Reflections—Part 1, Manufacturing Innovation blog, http://nistmep.blogs.govdelivery.com/25-year-

reflections/.



operation. Advanced, federally funded technology, however, did not prove to be what most

SMMs needed. Rather, their needs proved to be much more basic, including off-the-shelf

technologies and business advice on topics such as management information technology, financial

management systems, and business processes. A 1991 assessment of the program by the General

Accounting Office (GAO, now the Government Accountability Office) concluded that

While legislation establishing the Manufacturing Technology Centers Program

emphasized the transfer of advanced technologies being developed at federal laboratories,

the centers have found that their clients primarily need proven technologies. Thus, a key

mandate of this program is not realistically aligned with the basic needs of most small

manufacturers [emphasis added]... [A]ccording to officials from professional and trade

associations representing small manufacturers and the results of key studies on U.S.

manufacturing competitiveness, such advanced, laboratory-based technologies are not

practical for most small manufacturers because these technologies generally are expensive,

untested, and too complex.17

In recognition of this situation, the program was reoriented to offer more basic technologies that

helped SMMs to improve their productivity and competitive position. By the mid-1990s, MEP

was providing “a wide range of business services, including helping companies (1) solve

individual manufacturing problems, (2) obtain training for their workers, (3) create marketing

plans, and (4) upgrade their equipment and computers.”18 As articulated in the NIST

Manufacturing Innovation blog,

The initial services were focused on solving immediate and short-term problems—point

solutions. The philosophy was an engineering one: ‘You have a problem. We can fix it.’19

Over time, the MEP’s focus moved from point solutions to more strategic, integrated services. In

2010, the “overarching strategy” for the MEP program was to reduce manufacturing costs

through “lean, quality, and other programs targeting plant efficiencies” and to increase

profitability “through business growth services resulting in new sales, new markets, and new

products.”20

Current MEP efforts focus on innovation strategies, commercialization, lean production, process

improvements, workforce training, supply chain optimization, and exporting. One of the key

areas of the MEP strategy is technology acceleration.21 MEP defines technology acceleration as

integrating technology into the products, processes, services and business models of

manufacturers to solve manufacturing problems or pursue opportunities and facilitate

competitiveness and enhance manufacturing growth. Technology acceleration spans the

innovation continuum and can include aspects of technology transfer, technology

transition, technology diffusion, technology deployment and manufacturing

implementation.22

17 General Accounting Office, Technology Transfer, Federal Efforts to Enhance the Competitiveness of Small

Manufacturers, GAO/RCED-92-30, November 1991, p. 3.

18 General Accounting Office, Manufacturing Extension Program, Manufacturers’ Views About Delivery and Impact of

Services, GAO/GGD-96-75, March 1996, 2.

19 Dave Cranmer, Reflections—Part 2, Manufacturing Innovation blog, http://nistmep.blogs.govdelivery.com/

reflections-part-2/.

20 Slides provided by Roger D. Kilmer, Director, Hollings Manufacturing Extension Partnership, NIST, May 19, 2010.

21 Personal communication with MEP staff, October 8, 2015.

22 National Institute of Standards and Technology, presentation, “Advisory Board Committee on Technology

Acceleration (ABCTA) Report to the MEP Advisory Board,” September 24, 2014.



Technology acceleration encompasses MEP efforts to assist SMMs in the improvement of

existing products, the development of new products, and the development and improvement of

manufacturing processes. MEP assists SMMs in this regard through a variety of approaches

including technology scouting and transfer; supplier scouting; business-to-business network

pilots; lean product development; technology-driven market intelligence; access to capital;

cooperative research and development activities with NIST laboratories; and use of other federal

programs such as the Small Business Innovation Research (SBIR) program,23 the Advanced

Manufacturing Technology (AmTech) Consortia program, and the National Network for

Manufacturing Innovation (NNMI, also known as Manufacturing USA).24

While continuing to offer its services to all SMMs, MEP is emphasizing targeted outreach toward

growth-oriented SMMs and small entrepreneurial startups.25

Statutory Mission and Activities The statutory objective of the MEP centers is to enhance productivity and technological

performance in U.S. manufacturing through the following:

the transfer of manufacturing technology and techniques developed at NIST to

centers and, through them, to manufacturing companies throughout the United

States;

the participation of individuals from industry, universities, state governments,

other federal agencies, and, when appropriate, NIST in cooperative technology

transfer activities;

efforts to make new manufacturing technology and processes usable by U.S.-

based small- and medium-sized companies;

the active dissemination of scientific, engineering, technical, and management

information about manufacturing to industrial firms, including small- and

medium-sized manufacturing companies;

the utilization, when appropriate, of the expertise and capability that exists in

federal agencies and federally sponsored laboratories;

the provision to community colleges and area career and technical education

schools of information about the job skills needed in manufacturing companies,

including small and medium-sized manufacturing businesses in the regions they

serve;

promoting and expanding certification systems offered through industry,

associations, and local colleges when appropriate, including efforts such as

facilitating training, supporting new or existing apprenticeships, and providing

access to information and experts, to address workforce needs and skills gaps in

order to assist small- and medium-sized manufacturing businesses; and

23 For more information on the SBIR program, see CRS Report R43695, Small Business Innovation Research and

Small Business Technology Transfer Programs, by John F. Sargent Jr.

24 For more information on the NNMI, see CRS Report R43857, The Network for Manufacturing Innovation, by John

F. Sargent Jr.

25 Personal communication with MEP staff, October 8, 2015.



the growth in employment and wages at United States-based small and medium-

sized companies.26

No direct financial support is available for companies through the centers. The program offers

only technical and managerial assistance, and the cost of that is dependent on an MEP center’s

expenses.27

The statutorily authorized activities of centers include the following:

the establishment of automated manufacturing systems and other advanced

production technologies, based on NIST-supported research, for the purpose of

demonstrations and technology transfer;

the active transfer and dissemination of research findings and center expertise to

a wide range of companies and enterprises, particularly small and medium-sized

manufacturers; and

the facilitation of collaborations and partnerships between small and medium-

sized manufacturing companies, community colleges, and area career and

technical education schools, to help those entities better understand the specific

needs of manufacturers and to help manufacturers better understand the skill sets

that students learn in the programs offered by such colleges and schools.28

MEP Organization and Structure The MEP program includes an MEP program office located at NIST (NIST MEP), an MEP

Advisory Board, and the 51 MEP centers and their Oversight Boards. In FY2019, NIST MEP had

47 employees and received appropriations to support 80 FTE.29 The NIST FY2020 budget

justification, which seeks to end federal support for MEP, requested authorization for no FTE for

MEP.30

NIST MEP

A Director and Deputy Director lead the NIST MEP program office. The office is composed of

five divisions (see Figure 1), some with one or more groups. Here are the some of the activities

and areas of responsibility for each:

The Director’s Office works to provide a strong nationwide network of

Manufacturing Extension Partnership centers and supports partnerships across

the federal government and within industry that respond to the needs of state- and

local-based extension services and supports their integration as a nationwide

26 15 USC 278k(c).

27 According to NIST, the reimbursement structure for services varies among MEP centers. NIST MEP provides

centers with flexibility in programmatic approaches and financial models, while requiring adherence to strict

compliance with accounting systems, board governance, and reporting. NIST MEP does not provide MEP centers with

guidance on charging clients. Source: email communication between NIST and CRS on November 22, 2015; email

communication between NIST and CRS on July 25, 2018.

28 15 USC 278k(d).

29 Email communication from NIST to CRS, September 4, 2019.

30 National Institute of Standards and Technology, FY2016 Congressional Budget Justification, p. NIST-227,

http://www.osec.doc.gov/bmi/budget/FY16CJ/NIST-NTIS_FY_2016_CJ_Final_508_Compliant.pdf.



delivery system to strengthen the global competitiveness of small and medium-

sized U.S. manufacturers.

The External Affairs Performance and Support Division works is responsible

for executing the mission and vision of the organization for short-term and long-

term strategic planning, communication and program performance.

The Marketing and Communications Group is responsible for promoting

awareness of the MEP National Network to small and medium-sized

manufacturers as well as external and internal MEP stakeholders; is

responsible for all meetings and summits; and handles communications and

programmatic planning related to the MEP National Advisory Board.

The Program Evaluation and Economic Research Group carries out

performance evaluations of the MEP centers and the overall network;

monitors performance progress; manages center data reporting and client

survey processes; and coordinates among the centers and NIST MEP on

reporting, performance, and evaluation policy and issues.

The Finance Management and Center Operations Division prepares annual

budgets and operating outcome plans; tracks program expenditures against

multiple fiscal year plans; and manages all aspects of budget and finance.

The Center Operations Group conducts oversight of all MEP cooperative

agreements; executes division business plans related to cooperative

agreements; coordinates efforts among MEP and grants and procurement

offices; monitors centers regarding all financial and compliance aspects; and

takes corrective action with respect to centers that are inefficiently or

ineffectively providing services to manufacturing firms.

The Regional and State Partnerships Division engages in partnership

development with internal (i.e., NIST and other Department of Commerce offices

and agencies) and external organizations to identify, develop, and assign

resources; establishes and maintains strategic alliances with state and local

government agencies and legislatures, other federal agencies, and manufacturing-

related research organizations; and develops strategic alliances and partnerships

with original equipment manufacturers and trade associations. The division also

coaches and mentors new centers directors.

The Extension Services Division provides guidance and leadership to the MEP

National Network regarding the extension services offered by MEP centers;

identifies and develops new focus areas, approaches, tools, and techniques for

transforming SMMs into high performing enterprises; and establishes and

maintains national-level, strategic manufacturing technology alliances with NIST

laboratories, other federal agencies, manufacturing research organizations,

industry associations, and professional associations that support U.S. SMMs.

The Network Learning and Strategic Competitions Division manages

communities of practice and working groups; identifies manufacturing trends

related to SME needs and barriers to adoption; is responsible for the competition

processes used for MEP cooperative agreements; and conducts industry analyses

and analyzes emerging markets and supply chain technologies to identify

products and services to help SMMs be competitive in the global market.31

31 Email communication from NIST to CRS, September 4, 2019.



Figure 1. MEP Organizational Chart

Source: CRS, based on information provided by NIST on September 4, 2019. Structure as of August 2019.

MEP Advisory Board

Congress established an MEP Advisory Board to provide the NIST Director with advice on MEP

activities, plans, and policies; assessments of the soundness of MEP plans and strategies; and

assessments of current performance against MEP program plans.32 By statute, the MEP Advisory

Board is to consist of at least 10 members broadly representative of stakeholders appointed by the

NIST Director. The board is to include at least two members employed by or on an advisory

board for a center, at least five members from U.S. small businesses in the manufacturing sector,

and at least one member representing a community college. Federal employees may not serve as

advisory board members. Members serve staggered terms of three years. A member may serve

two consecutive terms. One year from the end of the second term, a member may be reappointed

to the board.

The MEP Advisory Board is to act solely in an advisory capacity in accordance with the Federal

Advisory Committee Act.33 The board is required to meet at least twice a year and to report

annually to Congress, through the Secretary of Commerce, on the status of the MEP program and

programmatic planning. Copies of the MEP Advisory Board annual reports are available online at

https://www.nist.gov/mep/about-mep/advisory-board/annual-advisory-board-reports.

MEP Centers

The MEP program is administered by NIST through partnerships with 51 centers in all 50 states

and Puerto Rico, including approximately 400 service locations34 and more than 1,300 field staff

with technical and business expertise.35 MEP seeks to have a center or other service location not

more than two hours away from any potential client. Appendix A provides a complete list of

current MEP centers.

32 15 USC 278k(e).

33 The Advisory Board is exempted from the provisions of Section 14 of the Federal Advisory Committee Act, which

addresses questions related to termination, renewal, and continuation of advisory committees.

34 According to NIST, “The definition of a service location is broad in that it encompasses locations for which an MEP

practitioner can operate out of in order to provide support for the manufacturing community. Service locations range

from one-person offices to fully staffed regional offices with all service locations intended to provide adequate

coverage for manufacturers. This includes partner locations that can be used to provide services to the manufacturers

across the states.” Source: Email communication between NIST and CRS, November 22, 2015.

35 National Institute of Standards and Technology, FY2019 Budget Submission to Congress, p. NIST-63,

http://www.osec.doc.gov/bmi/budget/FY19CBJ/NIST_and_NTIS_FY2019_President's_Budget_for_508_comp.pdf.



Each center is operated by a state government, university, or other nonprofit organization. Center

staff are employees of the center and its partners, not the federal government.

Center Selection The following sections provide an overview of the criteria used by NIST MEP in awarding

centers during the center recompetitions.

Criteria

MEP centers were selected in response to open and competitive solicitations issued by NIST.

Federal statute requires that center selections be based on merit using, at a minimum, the

following criteria:

the merits of the application, particularly those portions of the application

regarding technology transfer, training and education, and adaptation of

manufacturing technologies to the needs of particular industrial sectors;

the quality of service to be provided;

geographical diversity and extent of service area; and

the percentage of funding and amount of in-kind commitment from other

sources.36

Following the first MEP center awards in 1989, the number of centers grew to 70, including at

least one center in each state and Puerto Rico, and two or more centers in a few states. Later

consolidation reduced the number to 60, and under the recompetition to 51 (one in each state and

Puerto Rico).

System-Wide Center Recompetition

In 2017, NIST completed a recompetition of all its centers. At the time the recompetition began in

2014, many of the existing centers had not been competed for more than 20 years. According to

NIST, the system-wide competition sought to align center funding levels with the national

distribution of manufacturing activity and result in a single center in each state and Puerto Rico.

Other objectives included aligning center activities to the NIST MEP strategic plan; aligning

center activities with state and local strategies; providing opportunities for new partnering

arrangements; and restructuring and reinvigorating local center boards.37

Review Prior to Continued Center Funding Center awards are made as cooperative agreements with an initial performance period of five

years. NIST may extend an award for an additional five years following an overall assessment of

the center, including “programmatic, policy, financial, administrative, and responsibility

assessments.”38 According to NIST, when an application for a multiyear award is approved,

36 15 U.S.C. 278k(c)(4).

37 Telephone conversation between NIST MEP and CRS, October 23, 2015.

38 National Institute of Standards and Technology, “Award Competitions for Hollings Manufacturing Extension

Partnership (MEP),” 79 Federal Register 44746-44752, August 1, 2014, https://federalregister.gov/a/2014-18264.



funding is usually provided for only the first year of the project; for subsequent years, recipients

are required to submit detailed budgets and budget narratives prior to the award of any continued

funding. The amount of funds awarded after the first year is provided on a noncompetitive basis

and may be adjusted upward or downward. Center funding after the first year is contingent upon

satisfactory performance, continued relevance to the mission and priorities of the program, and

the availability of funds. Continuation of an award to extend the period of performance or to

increase or decrease funding is at the sole discretion of NIST.39

Center Cost-Share and Term of Eligibility The following sections provide current and historical information on center cost-sharing and term

of eligibility for funding.

Current Status of Cost-Sharing and Term of Eligibility

Funding for the MEP centers is provided on a cost-share basis by the federal government and

nonfederal sources. The federal government may provide up to 50% of the funds required to

establish and support a center regardless of the year of operation of the center. A center must meet

the required nonfederal cost-share to be eligible to receive federal funding.

Institutions eligible to compete for a center include nonprofit institutions, or consortia thereof;

institutions of higher education; or states, United States territories, local governments, or tribal

governments. There is no limit to the number of years a center may receive federal funding.

As discussed above, the recompetition sought to better align center funding levels with the

number of SMMs and the cost of providing services to these firms in each center’s service area.

In this regard, NIST MEP set federal funding levels for each state center. These amounts are the

maximum available for the federal cost-share, and a center must meet the required nonfederal

cost-share to be eligible to receive full funding. (Appendix B provides first-year funding awarded

centers in each state in the recompetition, as well as for those centers competed just prior to the

recompetition.)

Historical Background on Cost-Sharing and Term of Eligibility

Cost-Sharing

The financial support system created for MEP by Congress in the original legislation was based

on matching financing between the federal government and state, local, and/or private nonprofit

entities. The Senate Committee on Commerce, Science, and Transportation report to accompany

the Technology Competitiveness Act of 1987 (S. 907, 100th Congress) directed that “the

percentage of funding offered by particular applicants be considered in deciding which

applications be selected.”40 Cost-sharing strengthens the ties between the organizations involved

in the cooperative arrangement and as such, the committee stated that “special attention will be

given to innovative ways in which Federal laboratories, State agencies, and business and

professional groups can work together.”41 The matching provisions were seen as a means to

39 Email communication between NIST and CRS, slide presentation, October 30, 2015.

40 S.Rept. 100-80, p. 15.

41 Ibid., p. 17.



ensure that the centers reflect the actual needs of the manufacturing companies in the area they

serve.

The act establishing the Regional Centers for the Transfer of Manufacturing Technology (later the

Manufacturing Extension Partnership program) required applicants to provide more than 50% of

the capital and annual operating and maintenance costs in years three through six, but did not

specify the share to be paid. Instead, the act directed the Secretary of Commerce to determine the

maximum cost share and to publish it in the Federal Register.

Following the economic downturn of 2007-2009, there were calls for Congress to raise the

federal cost-share to 50% from one-third for centers in their fourth or subsequent year of

operation. At that time, some commentators argued that during the difficult economic situation,

state and local financial support for the program may be curtailed. At the same time, client fees

for service decreased 13.4% between FY2008 and FY2009, the first significant decline since

FY1996.42 Advocates of increasing the federal share noted that such action would permit

continued outreach to small manufacturers without pricing the services out of reach for the very

small manufacturers. Opponents of this approach argued that the one-third federal contribution

was sufficient and that the successful operation of the program was dependent on the financial

participation of state and local government as well as the companies utilizing the centers.

The America COMPETES Reauthorization Act of 2010 (P.L. 111-358) mandated that the GAO

explore and report on the cost-share provisions of the MEP program. In response, GAO issued a

report on April 4, 2011, that noted the following:

We were unable to provide recommendations on how best to structure the cost-share

requirement to provide for the long-term sustainability of the program because we could

not identify criteria or a basis for determining the optimal cost-share structure for this

program. Instead, we have identified a number of factors that could be taken into account

in considering modifications to the current cost-share structure. Among other things, past

GAO work has found that cost-share structures should promote equity by assigning costs

to those who both use and benefit from the services. As it applies to the MEP program,

manufacturers, state and local governments, and the nation may all benefit from the

program to varying degrees, requiring an evaluation of the relative benefits and aligning

cost-shares to reflect who receives the benefits.43

In this regard, GAO noted that NIST’s study of the cost-share provision of the MEP program

recommended that the cost-share requirements should be consistent with those of other

economic development programs—which it noted, in Commerce, had 1:1 or lower cost-

sharing—and should provide flexibility to alter the cost-share requirement in response to

economic conditions.44

However, GAO also noted that the Congressional Budget Office (CBO) had identified the MEP

program for potential elimination from discretionary spending, stating that the program’s

enhancement of U.S. productivity is questionable. According to CBO, the legislative agency

“regularly issues a compendium of budget options to help inform federal lawmakers about the

42 Slides provided by Roger D. Kilmer, Director, Hollings Manufacturing Extension Partnership, NIST, May 19, 2010.

43 Government Accountability Office, Factors for Evaluating the Cost Share of Manufacturing Extension Partnership

Program to Assist Small and Medium-Sized Manufacturers, GAO-11-437R, April 4, 2011, p. 4, http://www.gao.gov/

assets/100/97395.pdf.

44 Ibid., p. 4.



implications of possible policy choices.”45 Elimination of MEP was one more than 100 options

CBO proposed in 2011 for changes to federal spending and revenues.

In 2014, two bills were introduced with provisions that would have allowed federal support for

MEP centers of up to 50% of annual costs incurred, without regard to how long the cooperative

agreement has been in effect.46 The NIST Reauthorization Act of 2014 (H.R. 5035, 113th

Congress) passed the House but did not advance in the Senate. The America COMPETES

Reauthorization Act of 2014 (S. 2757, 113th Congress) was introduced in the Senate but did not

advance out of committee.

Also in 2014, the MEP Advisory Board recommended that MEP readjust the cost-share structure

in order to optimize the federal investment and provide for the long-term sustainability of the

program. Specifically, the board recommended requiring to a 1:1 match (50% federal cost share)

and allowing the nonfederal cost-share to include in-kind contributions of up to one-half of the

center’s portion of the cost-share.47

In 2015, the Senate Committee on Appropriations expressed concerns about the federal cost-share

structure (as it existed prior to the recent system-wide competition) and directed NIST to provide

a report to the committee and to the Senate Committee on Commerce, Science, and

Transportation “detailing quantifiable metrics on total MEP center funding, including a

breakdown of the type of contribution source across centers that have transitioned from the 50

percent Federal, 50 percent non-Federal cost-share to a lower cost-share held by the Federal

Government.”48

In 2017, Congress enacted the American Innovation and Competitiveness Act (P.L. 114-329),

which, among other things, allowed the Secretary of Commerce to provide up to 50% of center

costs regardless of the year of operation of a center.49

Term of Eligibility for Funding

The legislation that established the MEP program initially prohibited centers from receiving

federal financing beyond their sixth year of operation.50 However, federal support beyond the

sixth year later became considered necessary in lieu of increasing service charges paid by SMMs.

While analysts considered service charges to the SMMs to be important to the effectiveness of the

MEP program,51 some also expressed concerns that an increase in charges commensurate with

45 CBO, Reducing the Deficit: Spending and Revenue Options, March 10, 2011, https://www.cbo.gov/sites/default/files/

112th-congress-2011-2012/reports/03-10-reducingthedeficit.pdf. This issue is discussed in more detail later in the

report. See “Congressional Budget Office,” pp. 17-18.

46 Both H.R. 5035 (113th Congress ) and S. 2757 (113th Congress) defined “costs incurred” as costs incurred in

connection with the activities undertaken to improve the competitiveness, management, productivity, and technological

performance of small and medium-sized manufacturing companies.

47 MEP Advisory Board, 2014 Annual Report, http://www.nist.gov/mep/about/upload/Advisory-Board-Annual-Report-

2014.pdf.

48 S.Rept. 114-66.

49 NIST, “Award Competitions for Hollings Manufacturing Extension Partnership (MEP),” 79 Federal Register 44746-

44752, August 1, 2014, https://federalregister.gov/a/2014-18264.

50 15 U.S.C. 278k(c)(5), subsequently amended by P.L. 105-309.

51 In a 1995 study, the U.S. General Accounting Office found that firms that used internal funding to implement

recommendations offered by extension programs were the most likely to find an overall positive impact on their

manufacturing position. Source: U.S. General Accounting Office, Manufacturing Extension Programs, Manufactures’

Views of Service, GAO/GGD-95-216BR, August 1995.



making the centers self-supporting might make the services too expensive for many SMMs. This

perspective was articulated in a 1998 NIST-sponsored study:

Analysis indicates that to offset lost public revenue centers would need to take on much

larger projects at much higher billing rates and focus on repeat business. As a result, many

small manufacturers would not be able to afford these services. Given this conclusion, the

best way to ensure high-caliber nationwide assistance to smaller manufacturers is to

commit to a stable amount of renewable federal funding for those centers which receive

successful evaluations.52

The prohibition on funding after the sixth year was temporarily suspended by provisions in the

FY1997 and FY1998 appropriations acts,53 then eliminated by the Technology Administration Act

of 1998 (Section 2, P.L. 105-309). Under the provisions of the act, centers were eligible to receive

federal funding of up to one-third of center costs after their sixth year of operation, subject to

positive, independent evaluations to be conducted at least every two years. As discussed above, in

2017, the American Innovation and Competitiveness Act (P.L. 114-329) allows the Secretary to

provide up to 50% of center funding, regardless of its year of operation.

Other MEP-Related Activities The MEP program has provided additional funding opportunities for a number of activities that

support the program’s overarching mission. The Competitive Awards Program (CAP), awards to

support the embedding of MEP staff in Manufacturing USA institutes (also referred to as the

Embedding Program), the MEP-Assisted Technology and Technical Resource (MATTR)

program, and workforce credentials project are examples of such activities.

A number of other efforts have been completed, including business-to-business networks, Make it

in America Challenge, Advanced Manufacturing Jobs and Innovation Accelerator Challenge, and

Manufacturing Technology Acceleration Centers.

These activities, current and completed, are discussed below.

Current MEP-Related Activities

Competitive Awards Program

In 2017, Congress established the CAP program for “the development of projects to solve new or

emerging manufacturing problems.”54 Awards are to be made on a peer-reviewed and competitive

basis55 and may span a period of up to three years.56 No matching funds are required under CAP.57

NIST has used a rolling Notice of Funding Opportunity (NOFO) to solicit funding applications

for cooperative awards of $50,000 to $1.0 million each.58 Only NIST-funded MEP centers with

52 E.S. Oldsman, G.M. Ugiansky, and R. Jamin, Review of Mission and Operations of Regional Centers, National

Institute of Standards and Technology, February 1, 1998, available at http://www.nist.gov/cgi-bin/view_pub.cgi?

pub_id=200288&divison=260.

53 P.L. 104-208 and P.L. 105-277, respectively.

54 15 U.S.C. 278k-1(c)(1).

55 15 U.S.C. 278k-1(e)(1).

56 15 U.S.C. 278k-1(h).

57 15 U.S.C. 278k-1(f).

58 See for example, “Notice of Funding Opportunity (NOFO), NIST MEP Competitive Awards Program,” 2017-NIST-



specified performance ratings are eligible to apply. Centers can apply individually or in

partnership with other centers and collaborating entities such as local economic development

organizations, universities, community colleges, and other organizations.59

Proposals are to be evaluated on the basis of their likelihood of achieving one or more of the

following objectives:

improving the competitiveness of industries in the region in which the center or

centers are located;

creating jobs or train newly hired employees;

promoting the transfer and commercialization of research and technology from

institutions of higher education, national laboratories or other federally funded

research programs, and nonprofit research institutes;

recruiting a diverse manufacturing workforce, including through outreach to

underrepresented populations;

producing other results the NIST director determines will advance the CAP

objective.60

The statute also encourages the NIST director to seek “broad geographic diversity among selected

proposals”61 and to consider “significant potential for enhancing the competitiveness of small and

medium-sized United States manufacturers in the global marketplace.”62

Further, the statute provides for the NIST director to “identify [one] or more themes for a

competition carried out under this section, which may vary from year to year, as the Director

considers appropriate after assessing the needs of manufacturers and the success of previous

competitions.” Themes identified by the NIST director—developed in consultation with the MEP

Advisory Board and other federal agencies, and specified in the NOFO—are new manufacturing

technologies of relevance to small and mid-size manufacturers, particularly those related to

Industry/Manufacturing 4.0;63 supply chain management technologies and practices; and

workforce intermediary and business services.64 Service area thrusts for CAP awards under these

themes include Food Industry Services/Food Manufacturing, Toyota Kata, and Cybersecurity for

Manufacturing.

In September 2017, NIST announced seven CAP awards to add capabilities to the MEP national

network.

Georgia MEP Center. Two awards were made to the Georgia MEP center:

NIST made a three-year award of approximately $346,000 to the Georgia

MEP center, working in collaboration with seven MEP centers, for a project

to understand and develop support services for the Georgia machine shop

industry to create new markets and implement new technology.

MEP-CAP-01, April 17, 2017,

https://www.nist.gov/document/20170417cap01meprollingcompetitiveawardsprogramnofofinalpdf.

59 Ibid., p.3.

60 15 U.S.C. 278k-1(e)(3).

61 15 U.S.C. 278k-1(e)(2).

62 15 U.S.C. 278k-1(g).

63 NIST, “Notice of Funding Opportunity (NOFO), NIST MEP Competitive Awards Program,” 2017-NIST-MEP-CAP-

01, April 17, 2017, https://www.nist.gov/document/20170417cap01meprollingcompetitiveawardsprogramnofofinalpdf.

64 Ibid., pp. 4-5.



NIST made a seven-month award of $35,000 to the Georgia MEP center,

working in collaboration with seven MEP centers, to support a Department of

Transportation-NIST Inter-Agency Agreement to promote and support

execution of the Supplier Connectivity Forum in Atlanta to increase business

connections and expand U.S. suppliers in the supply chain.

New Jersey MEP Center. NIST made a two-year award of approximately

$974,000 to the New Jersey MEP, working in collaboration with 10 MEP centers,

to establish a program that will support Food Safety Modernization Act (FSMA)

capacity building in MEP centers, and offer FSMA readiness assessments,

implementation road maps, access to expert FSMA practitioners, and product

launch supports.

Virginia MEP Center. NIST made a two-year award of $1.0 million to the

Virginia MEP center, working in collaboration with six MEP centers, to support a

project to use the MEP national network to address a set of critical supply chain

needs and improve the global competitiveness of small and medium-sized

medical device and medical instrument and supply manufacturers nationwide.

Nevada MEP Center. NIST made a two-year award of $1.0 million to the

Nevada MEP center, working in collaboration with eight MEP centers, to

promote MEP center staff as “trusted advisors” able to support SMMs to become

globally competitive, with growth services, supply chain development, energy

savings, strategic planning, and other initiatives.

North Carolina MEP Center. NIST made a three-year award of approximately

$1.0 million to the North Carolina MEP center, working in collaboration with

two MEP centers, to support a project to address the needs of small, rural

manufacturers seeking to innovate and expand but struggling to address the

demands of modern digital supply chains.

Michigan MEP Center. NIST made a one-year award of approximately

$785,000 to the Michigan MEP center, working in collaboration with five MEP

centers, to develop a Network Cybersecurity Program that seeks to save

companies and jobs while upgrading the value of suppliers to their customers and

the skills of their workforce.65

In September 2018, NIST announced CAP awards of $7 million to eight centers to add

capabilities to the MEP national network.

Georgia MEP Center. NIST made a three-year award of approximately

$986,000 to the Georgia MEP center (in concert with MEP centers in Idaho,

Oregon, and Iowa) to develop and deliver Food Safety Modernization Act

(FSMA) compliance and food safety management system implementation

services targeting very small food and beverage manufacturers within each state.

South Dakota MEP Center. NIST made a three-year award of approximately

$897,000 to the South Dakota MEP center to make SMMs more competitive and

efficient by implementing technological innovations, creating a

training/demonstration lab targeting non-traditional new hires that need to

acquire skills for employment and incumbent workers seeking to upskill and

advance in their careers; collaborating with the NIST Engineering Lab to

standardize interface between automated guided vehicles and cognitive radios;




and developing an automation lab at South Dakota Manufacturing and

Technology Solutions to deploy technology directly to manufacturers.

Hawaii MEP Center. NIST made a three-year award of $1.0 million to the

Hawaii MEP center to support a project to help companies overcome skills and

talent shortages through in-house training development.

Missouri MEP Center. NIST made a three-year award of $1.0 million to the

Missouri MEP center to support a project to build robust specialty food

manufacturing practices and support SMMs engaged in providing safe food for

the nation, and to help food manufacturers comply with regulatory requirements.

New York MEP Center. NIST made a three-year award of approximately

$778,000 to the New York MEP center to establish a multifaceted

commercialization assistance program for entrepreneurs, innovators, and young

and very small companies.

Montana MEP Center. NIST made a three-year award of $750,000 to the

Montana MEP center to create a regional training and technical assistance model

to help rural food industry SMMs in the Northwest region of the United States

increase their competitiveness by addressing the requirements of FSMA.

Nevada MEP Center. NIST made a three-year award of $1.0 million to the

Nevada MEP center to support the development of partnerships with state

manufacturing innovation centers and to extend university research and related

industry innovation in support of Industry 4.0 to small and medium-sized

manufacturers (SMMs) in their center’s geographic region.

Puerto Rico MEP Center. NIST made a two-year award of approximately

$630,000 to the Puerto Rico MEP center to improve the competitive position of

small manufacturers with less than 100 employees operating in the food industry

in Puerto Rico using the Toyota Kata methodology to develop a culture of

continuous improvement to assist in compliance with requirements of FSMA.

Embedding of MEP Staff in Manufacturing USA Institutes

In 2016 and 2017, NIST made 14 awards of approximately $1.2 million each in three rounds of

competitions to establish partnerships between MEP and the 14 operating Manufacturing USA

institutes (also known as the National Network for Manufacturing Innovation or NNMI).66 The

awards required no cost-share and had a two-year period of performance; most projects were

granted no-cost extensions by NIST to continue working up to an additional year. This effort is

sometimes referred to as the Embedding Project. Some projects have ended; others will operate

into 2020.67

The purpose of these awards, according to NIST, was to further transition of technologies

developed at the NNMI institutes to small and medium-size manufacturers.68 Specifically,

embedded staff were to

develop innovate approaches for transferring technology from the Manufacturing USA

institutes to small U.S. manufacturers; create approaches for engaging small manufacturers

66 For more information on the Manufacturing USA/NNMI institutes, see CRS Report R44371, The National Network

for Manufacturing Innovation, by John F. Sargent Jr.

67 Email from NIST to CRS, August 21, 2019.




in the work of the institutes through hands-on assistance and services; develop and test

business models by which MEP centers and institutes may effectively serve the needs of

small U.S. manufacturers in the technology areas of the institutes, and facilitate knowledge

and best practice sharing; and cultivate an enhanced nationwide network of partnerships

among the institutes and MEP centers.69

The awards were made to the following centers:

California MEP center, to partner with the Clean Energy Smart Manufacturing

Innovation Institute.

California MEP center, to partner with NextFlex, the Flexible Hybrid Electronics

Manufacturing Innovation Institute.

Delaware MEP center, to partner with the National Institute for Innovation in

Manufacturing Biopharmaceuticals (NIIMBL).

Illinois MEP center, to partner with the Digital Manufacturing and Design

Innovation Institute (DMDII).

Massachusetts MEP center, to partner with the Advanced Functional Fabrics of

America (AFFOA) Institute.

Massachusetts MEP center, to partner with the Advanced Regenerative

Manufacturing Institute (ARMI).

Michigan MEP center, to partner with Lightweight Innovations for Tomorrow

(LIFT).

New York MEP center, to partner with the Reducing Embodied-energy and

Decreasing Emissions (REMADE) Institute.

New York MEP center, to partner with the American Institute for Manufacturing

Integrated Photonics (AIM Photonics).

North Carolina MEP center, to partner with Power America.

Oregon MEP center, to partner with the Rapid Advancement in Process

Intensification Deployment (RAPID) Institute.

Pennsylvania MEP center, to partner with America Makes, the National Additive

Manufacturing Innovation Institute.

Pennsylvania MEP center, to partner with the Advanced Robotics Manufacturing

(ARM) Institute.

Tennessee MEP center, to partner with the Institute for Advanced Composites

Manufacturing Innovation (IACMI).70

According to NIST, initial survey responses from MEP centers indicate “significant new and

retained revenue, operational cost savings, and new client investments.”71

69 NIST, “NIST Awards $12 Million to MEP Centers in 11 States,” press release, January 13, 2017,

https://www.nist.gov/news-events/news/2017/01/nist-awards-12-million-mep-centers-11-states.

70 NIST, “Pilot Projects Will Bring MEP Small-Business Expertise to Manufacturing USA Institutes,” September 13,

2016; NIST, “NIST Awards $12 Million to MEP Centers in 11 States,” January 13, 2017; and NIST, “Twelve Awards

Made for Notices of Funding Opportunities,” September 1, 2017.

71 Email from NIST to CRS, August 21, 2019.



MEP-Assisted Technology and Technical Resource (MATTR) Program

The NIST MATTR program provides MEP SMM clients access to the laboratory’s core scientific

and engineering capabilities, in advanced manufacturing technology, collaborative robotics,

additive manufacturing, materials design and characterization, nanotechnology, information and

communications technology, quantum information, biosciences, industrial standards,

cybersecurity, and other fields.

The MATTR program provides a mechanism for manufacturers with specific needs or

questions concerning products or processes to be connected through the MEP centers to

the technical expertise, laboratory facilities, and other resources of the NIST laboratories.

It also allows NIST lab staff to inquire of the MEP National Network if there are needs in

the manufacturing arena that NIST should address.72

NIST offers many kinds of technical assistance through the MATTR program at no cost.

However, NIST may charge fees for certain services such as instrument calibrations and special

measurements. NIST has rendered technical assistance to SMMs under MATTR on a number of

issues, including nanotechnology and thin film measurement technology. NIST is also using

MATTR to increase awareness among SMMs of the NIST library of patents and products

available for licensing.73

Value and Utility of Skill Credentials to Manufacturers and Workers

The manufacturing workforce is a significant concern for SMMs, including the number of

workers available with the knowledge and skills required for unfilled jobs. Some assert a

mismatch between open positions in manufacturing firms and the skills of potential employees.

One mechanism for addressing this mismatch is the use of skills credentials. In coordination with

the NIST Standards Coordination Office (SCO), MEP awarded a competitive contract to

Workcred, an affiliate of the American National Standards Institute, to examine the quality,

market value, and effectiveness of manufacturing credentials, and the need for new or improved

manufacturing credentials.74

In April 2018, Workcred published the results of its study in the report, Examining the Quality,

Market Value, and Effectiveness of Manufacturing Credentials in the United States.75 According

to NIST, 945 manufacturers participated in the study’s surveys and in-depth focus groups. The

report cites the following key findings:

credentials have uneven use in the manufacturing industry and are not routinely

required or used as a major factor in hiring or promotion decisions;

many manufacturers do not know what credentials are available or how they are

relevant to their workplace;

facility size appears to influence credential use, with large manufacturing

facilities more likely to prefer credentials than smaller facilities;

72 NIST, “Connecting Manufacturers to NIST Laboratories,” website, article written by FuzeHub, November 30, 2017,

https://www.nist.gov/blogs/manufacturing-innovation-blog/connecting-manufacturers-nist-laboratories.

73 Ibid.

74 NIST financial assistance award 70NANB16H239, made under an Announcement of Federal Funding Opportunity

(FFO, 2016-NIST-MSE-01) by the NIST Material Measurement Laboratory (MML) Grant Program. The NIST FFO

can be accessed at https://www.nist.gov/sites/default/files/documents/2017/06/20/fy16-mse-ffo_1.pdf. 75 Workcred, Examining the Quality, Market Value, and Effectiveness of Manufacturing Credentials in the United

States, April 2018, https://workcred.org/Documents/NIST-MEP-Report.pdf.



many manufacturers do not view credentials as the most relevant tools to identify

new skilled personnel or as incentives to improve the quality of their existing

workforce;

manufacturers often feel they need to train new employees regardless of whether

or not they held a credential, and could not quantify whether credentials added

value in terms of reduced cost or reduced training time; and

manufacturers believe that credentials could serve as a critical resource if they

were better understood and made more in line with skills needed in their

facilities.76

In addition, the report recommended:

improving understanding about the content, use, and value of credentials;

expanding the use of quality standards for credentials;

strengthening relationships between employers, education and training providers,

and credentialing organizations;

adding an employability skills component to existing and new credentials;

creating credentials that focus on performance and address new roles; and

increasing the number of apprentices and expanding apprenticeships to more

occupations.77

Completed MEP-Related Activities

Business-to-Business Networks

In December 2014, NIST MEP awarded $2.5 million to 10 MEP centers for the establishment of

pilot projects to develop, deploy, and maintain business-to-business (B2B) networks.78 These

networks were intended to help match buyers and sellers of technologies or products and services

in support of SMMs. The two-year projects were designed to be scalable and interoperable to help

determine whether they could be expanded into a national network or a series of regional ones.79

The B2B Network projects have been completed.

Make it in America Challenge

In December 2013, NIST MEP awarded grants to 10 winners in nine states as part of the

multiagency Make it in America (MiiA) Challenge, an Obama Administration initiative to

accelerate job creation and encourage business investment in the United States. Nine awards were

76 Ibid.

77 Ibid.

78 Funding for the B2B awards was provided via reprogramming of $2.5 million in FY2014 appropriations from the

NIST Technology Innovation Program. Source: Letter from Ellen Herbst, Chief Financial Officer and Assistant

Secretary for Administration, Department of Commerce, to Senator Barbara Mikulski, Chairwoman, Senate Committee

on Appropriations, March 7, 2014.

79 National Institute of Standards and Technology, FY2016 Congressional Budget Justification, pp. NIST-229-NIST-

230, http://www.osec.doc.gov/bmi/budget/FY16CJ/NIST-NTIS_FY_2016_CJ_Final_508_Compliant.pdf; NIST, press

release, “NIST Awards $2.5 Million in Grants to MEP Centers for Pilot Business-to-Business Networks,” December 2,

2014, http://www.nist.gov/mep/mep-120214.cfm.



to MEP centers. Two were to affiliates of the Ohio MEP center. Each received $125,000 per year

for three years.80 All MiiA projects have been completed.

According to NIST, MiiA was intended to support the efforts of U.S. companies to keep, expand,

or reshore manufacturing operations and jobs in the United States, and to encourage foreign

companies to build facilities in the United States and make products domestically. The MEP’s

MiiA Challenge grants were intended to support greater connectivity in regional supply chains

and to assist SMMs.

Advanced Manufacturing Jobs and Innovation Accelerator Challenge

NIST MEP centers participated in the Advanced Manufacturing Jobs and Innovation Accelerator

Challenge (AMJIAC), a multiagency effort seeking to strengthen U.S. manufacturing.81 A 2012

solicitation led to 10 three-year awards totaling $20 million. All AMJIAC projects have been

completed.

According to NIST:

These grants support the creation and strengthening of regional partnerships capable of

accelerating innovation and growing a region’s capacity for advanced manufacturing. This

funding has been used for activities such as worker training programs or connecting

manufacturers to resources like national labs or universities. Ultimately, these grants

present regions with an opportunity not only to expand their current activities, but also to

fundamentally transform the way that the region supports its manufacturers.82

The role of the MEP center participation varied in the awards. In some cases, an MEP center had

the primary management role. In other cases, an MEP center was engaged in a partnership with

another organization to lead different project elements. In still other cases, an MEP center was

part of a broad-based partnership with different organizations leading one or two project

elements.

Manufacturing Technology Acceleration Centers

In July 2013, NIST announced a pilot program under MEP, the Manufacturing Technology

Acceleration Centers (M-TACs). M-TACs were designed

to explore different approaches to providing manufacturers with the technology transition

and commercialization assistance they need to compete successfully and grow their market

share within manufacturing supply chains.83

All M-TAC projects have been completed.

80 The award recipients were: Maine MEP; Michigan Manufacturing Technology Center; InnovateMEP Mississippi;

Missouri Enterprise; Ohio MEP (State of Ohio, Ohio Development Services Agency: two awards, including the

Appalachian Partnership for Economic Growth and the Manufacturing Advocacy and Growth Network); Oregon MEP;

Northeastern Pennsylvania Industrial Resource Center; South Carolina MEP; and Impact Washington. Source: Email

communication between NIST and CRS, November 5, 2015.

81 Participating agencies include the NIST, the Department of Commerce’s Economic Development Administration, the

Department of Energy, the Department of Labor’s Employment and Training Administration, the Small Business

Administration, and the National Science Foundation.

82 NIST, The Advanced Manufacturing Jobs and Innovation Accelerator Challenge (AMJIAC): Mid-Project Review,

May 2014, http://www.nist.gov/mep/upload/AMJIAC-Report-final0520.pdf.

83 NIST, Manufacturing Technology Acceleration Center (M-TAC) Pilot Project): Report on Initial Progress and

Learning, February 2015, p. 5, http://www.nist.gov/mep/services/supplychain/upload/MTAC_Report-print.pdf.



Other Grants

In October 2010, NIST announced $9.1 million in cooperative agreements for 22 projects

“designed to enhance the productivity, technological performance and global competitiveness of

U.S. manufacturers.”84 The funding was provided by MEP on a competitive basis to nonprofit

organizations to work with the MEP centers and address one or more of these areas identified by

NIST as critical to U.S. manufacturing:

responding to evolving supply chains;

accelerating the adoption of new technology to build business growth;

implementing environmentally sustainable processes;

establishing and enabling strong workforces for the future; and

encouraging cultures of continuous improvement.85

According to NIST, “The funding will help encourage the creation and adoption of improved

technologies and provide resources to develop new products that respond to changing market

needs.”86 In this regard, the awards differed from other MEP center activities which do not

support research activities.

MEP Strategic Plan In 2017, NIST MEP released its MEP National Network Strategic Plan. Among other things, the

plan identified MEP strategic goals and objectives. The four goals of the plan are to

empower U.S. manufacturers, by assisting them in adopting productivity-

enhancing innovative manufacturing technologies, navigating advanced

technology solutions, and recruiting and retaining a skilled and diverse

workforce;

champion manufacturing, by promoting the importance of a strong

manufacturing base to the U.S. economy and protection of national security

interests, creating awareness of innovations in manufacturing, creating enabling

workforce development partnerships to build a stronger and diverse pipeline, and

maximizing awareness of the MEP national network;

leverage partnerships, by leveraging national, regional, state, and local

partnerships to increase market penetration, identifying mission-complementary

advocates to help expand the brand recognition of the MEP national network, and

building an expanded service delivery model to support manufacturing

technology advances; and

transform the network, by maximizing the MEP’s knowledge and experience to

operate as an integrated national network, increasing efficiency and effectiveness

by employing a learning organization platform, and by creating a resilient and

84 NIST, “NIST Manufacturing Extension Partnership Awards $9.1 Million for 22 Projects to Enhance U.S.

Manufacturers’ Global Competitiveness,” press release, October 5, 2010, http://www.nist.gov/mep/mep_100510.cfm.

85 Ibid.

86 NIST, “NIST Manufacturing Extension Partnership Awards $9.1 Million for 22 Projects to Enhance U.S.

Manufacturers’ Global Competitiveness,” press release, October 5, 2010, https://www.nist.gov/news-

events/news/2010/10/nist-manufacturing-extension-partnership-awards-91-million-22-projects.



adaptive MEP national network to support a resilient and adaptive U.S.

manufacturing base.87

For additional information, including the strategic plan’s objectives, measures of success, and

priorities, download the report at https://www.nist.gov/document/

mepnationalnetworkplan2017to2022finalpdf.

Annual Report to Congress NIST is required to annually produce and submit to Congress a three-year programmatic planning

document, concurrent with the President’s annual budget request. This report is to include an

assessment of the NIST Director’s governance of the MEP program.

The latest version of the plan, NIST Three-Year Programmatic Plan: 2017-2019, includes the

following information about the MEP program:

NIST’s MEP provides technical and business assistance to smaller manufacturers through

partnerships between Federal and state governments and non-profit organizations in all 50

states and Puerto Rico. Field agents and programs help manufacturers understand, adopt,

and apply new technologies and business practices, increasing productivity, performance,

cost savings, reducing waste and creating and retaining manufacturing jobs. MEP also is a

strategic advisor to promote business growth and innovation and to connect manufacturers

to public and private resources essential for expanding into new markets, developing

efficient processes, and training an advanced workforce.88

The NIST Three-Year Programmatic Plan: 2017-2019 report can be accessed at

https://www.nist.gov/sites/default/files/documents/director/planning/3_year_plan_2017-

19_web_ready2.pdf.

External Reviews and Recommendations A number of organizations have reviewed and commented on the program’s management and

effectiveness, and some have offered recommendations for improving the program. The following

sections discuss some of the findings and recommendations of these organizations.89

MEP Advisory Board

The FY2018 MEP Advisory Board annual report discussed a variety of the board’s activities,

including:

the board’s participation in the Government Accountability Office’s (GAO)

report on the increase to the maximum level of federal cost-sharing in MEP

centers to 50% under the 2017 American Innovation and Competitiveness Act;

updates on progress to the MEP National Network Strategic Plan for 2017-2022,

NIST MEP competitive awards, embedding MEP Center staff at Manufacturing

USA Institutes projects, disaster assistance assessments for manufacturers, and

87 NIST, 2017-2022 MEP National Network Strategic Plan, https://www.nist.gov/document/

mepnationalnetworkplan2017to2022finalpdf.

88 Ibid., p. 8.

89 Other comments and recommendations by these organizations are included elsewhere in this report.



the results of the independent study conducted by the W.E. Upjohn Institute for

Employment Research on the MEP program’s economic impacts; and

progress reports on the board’s working groups:

Performance/Research Development, focused on the issue of performance

measurement and management, evaluation, and research to support the MEP

National Network;

Supply Chain Development, focused on development of manufacturing

supply chains, with an emphasis on defense suppliers to address Defense

industrial base gaps; and

Advisory Board Executive Committee, focused on future Advisory Board

leadership and membership recruitment, cultivation of strong Board

governance, and expansion of the Advisory Board’s role with local MEP

center boards.90

Government Accountability Office

The Government Accountability Office has reviewed aspects of the MEP program on several

occasions since the early 1990s. This section provides highlights of those reviews in reverse

chronological order.

In March 2019, GAO issued a congressionally-mandated report on the implementation of the

American Innovation and Competitiveness Act provision that allowed the federal government to

provide up to 50% of center funding regardless of the center’s year of operation; previously,

centers in their fourth year could receive no more than 40%, and those in their fifth and later

years could receive no more than one-third. The GAO report stated that MEP centers reported that

the change improved their financial stability and helped them to better serve SMMs, especially

very small and rural manufacturers. The report noted that the change in cost-sharing occurred

concurrently with other factors (notably the recompetition of the centers), making it hard to

determine the exact impact of the cost-share change.91

In an April 2017 report on advanced manufacturing, GAO recommended that the Department of

Commerce strengthen its collaboration with the other agencies participating in Manufacturing

USA.92 The Revitalize American Manufacturing and Innovation Act of 2014 (RAMI Act), which

established a statutory basis for a Network of Manufacturing Innovation (now branded as

“Manufacturing USA”), directed the Secretary of Commerce to ensure that MEP is incorporated

in the Manufacturing USA institutes to ensure the research results reach SMMs. NIST has sought

to accomplish this by placing MEP staff in the institutes through competitive grants to MEP

centers. (See “Embedding of MEP Staff in Manufacturing USA Institutes.”)

In a March 2014 report, GAO reported on its investigation into the extent to which the MEP

program achieves administrative efficiencies. GAO found that 81.4% of MEP funding supported

90 NIST, MEP Advisory Board, 2017 Annual Report, https://www.nist.gov/document/final-

mepadvisoryboard2017annualreportpdf-2.

91 GAO, U.S. Government Accountability Office, Manufacturing Extension Partnership: Centers Cite Benefits from

Funding Change, but Impacts Hard to Distinguish from Other Factors, GAO-19-219, March 7, 2019,

https://www.gao.gov/assets/700/697319.pdf.

92 GAO, U.S. Government Accountability Office, Advanced Manufacturing: Commerce Could Strengthen

Collaboration with Other Agencies on Innovation Institutes, GAO-17-320, April 6, 2017, http://www.gao.gov/assets/

690/684343.pdf.



center awards with the balance devoted to contracts, staff, agency-wide overhead charges, and

other items, some of which NIST considered direct support and some of which NIST considered

administrative spending. In total, NIST estimated that more than 88.5% of federal MEP program

spending in FY2013 was for direct support, and the remainder supported MEP administration.93

In 2010 Congress directed the GAO to report on the cost-share structure of the MEP program and

provide recommendations for how best to structure the cost-share requirement to provide for the

long-term sustainability of the program.94 GAO concluded that it was unable to provide such

recommendations, as it could not identify criteria or a basis for determining the optimal cost-

share structure for this program.95 However, GAO cited a number of factors that could be taken

into account in modifying the existing cost-share structure including promoting equity by

assigning costs to those who both use and benefit from the services. In this regard, GAO

identified potential beneficiaries as manufacturers, state and local governments, and the nation

and recommended an evaluation of the relative benefits and aligning cost-shares to reflect who

receives the benefits.96 (See “Cost-Sharing” for a further discussion of GAO’s findings.)

In an August 1995 briefing paper, the GAO explored how small and medium-sized firms were

served by various manufacturing extension efforts, including the MEP program.97 GAO received

551 responses to 766 questionnaires distributed. Approximately 73% of responding firms stated

that their relationships with an extension activity had a positive effect on the company’s business

performance. Fifteen percent indicated that there was no effect at all. Among the impacts

identified were improved use of technology (63%), better product quality (61%), and expanded

productivity (56%). According to GAO, this suggested that manufacturing extension activities

“had some success in achieving their primary goal of helping manufacturers improve their

operations through the use of appropriate technologies and through increases in product quality

and worker productivity.” The study also found that companies which used internal funding to

implement recommendations offered by extension programs were the most likely to find an

overall positive impact. “Significantly, approximately 97 percent of [these respondents] ... said

that they believed that this investment had been worthwhile.” Those who utilized these

organizations noted that practical experience in the field contributed to the success of staff

activities, as did the affordability of the assistance. Companies that did not utilize the resources

provided by the MEP tended to be those that were unaware of the program and the opportunities

associated with it.

Further refining this information in a March 1996 report, GAO also noted that company size and

age were significant factors in business perceptions of the extension program. Smaller (under $1

million gross sales) and newer (established after 1985) firms “were most likely to report that their

overall business performance was boosted by MEP assistance.”98 While there were no real

93 Government Accountability Office, Most Federal Spending Directly Supports Work with Manufacturers, but

Distribution Could Be Improved, GAO-14-317, March 2014.

94 America COMPETES Reauthorization Act (P.L. 111-358).







97 U.S. Government Accountability Office, Manufacturing Extension Programs, Manufacturers’ Views of Services,

GGD-95-216BR, August 7, 1995, http://gao.gov/products/GGD-95-216BR.

98 Government Accountability Office, Manufacturing Extension Programs, Manufacturers’ Views about Delivery and

Impact of Services, GGD-96-75, March 14, 1996, p. 3, http://gao.gov/products/GGD-96-75.



differences in perception between extension services offered by NIST and those funded by other

institutions, there was a difference in assessments of effectiveness based on whether or not

payment was required. According to GAO, those firms that paid fees “were half as likely as those

that paid no fees to credit the assistance for having an extremely positive impact, as opposed to a

generally positive impact, on their business performance.”

Congressional Budget Office

As discussed earlier, the CBO regularly issues a compendium of budget options to help inform

federal lawmakers about the implications of possible policy choices. In 2009 and 2011, one of the

options CBO proposed was elimination of the MEP program; more recent editions of CBO’s

Options for Reducing the Deficit have not included the MEP program among its options.

In its 2009 narrative, CBO asserted that proponents of elimination question the appropriateness

and necessity of the type of technical assistance offered by MEP, stating that “many university

professors of business, science, and engineering consult with private industry, and other ties

between universities and business promote knowledge transfer,” that many centers in the MEP

system existed before the establishment of the MEP program, and that surveys indicated that

about half of MEP’s clients reported that the same services were available to them through other

channels but at a higher price. Supporters of the MEP program, according to CBO, point to the

importance of SMMs to the economy in terms of output and employment, and in providing

supplies and intermediate goods for large companies. Proponents also argue that many SMMs

“face barriers that can prevent them from obtaining the sort of information” that MEP provides.99

CBO also asserted that

The program’s enhancement of U.S. productivity also is questionable. It can be argued that

federal spending for [MEP] allows some inefficient companies to remain in business, tying

up capital, labor, and other resources that could be used more productively elsewhere.100

National Academy of Public Administration

The National Academy of Public Administration also studied the MEP program and in a 2004

report stated that while “on balance ... the MEP Program performs capably and effectively and

that the core premise ... remains viable as it is fulfilling its mission by leveraging both public and

private resources to assist the nation’s small manufacturers,” there should be consideration of a

“fundamental change in the mix of the types of services it provides as well as the structures for

delivering them.”101 As such, a Next Generation Strategic Plan was developed by the MEP in

2006 to concentrate on not just the shop floor but on “the entire enterprise and its position in the

marketplace.” In addition to individual manufacturing firms, NIST concluded that MEP “must

focus on industry/supply chain requirements as well as overall economic development trends.”102

Current MEP efforts include a focus on helping companies to participate in supply chains (e.g., by

helping them become compliant with quality standards) and on supply chain optimization.

99 Congressional Budget Office, Budget Options: Volume 2, 370-372, p. 88, August 2009, https://www.cbo.gov/sites/

default/files/111th-congress-2009-2010/reports/08-06-budgetoptions.pdf.

100 Ibid.

101 National Academy of Public Administration, The Manufacturing Extension Partnership Program, Report 2,

Alternative Business Models, May 2004, available at http://www.napawash.org/Pubs/NIST6-2-04.pdf.

102 Manufacturing Extension Partnership, Next Generation Strategic Plan, 2006, http://www.mep.nist.gov/documents/

pdf/about-mep/Next_Gen_MEP_Strategy.pdf.



Appropriations and Related Issues This section provides information on FY2019 appropriations for MEP, the status of FY2020

appropriations, and a longer-term perspective on MEP budget requests and appropriations from

FY2003-FY2020.

FY2019 Appropriations and the FY2020 Request

As with his FY2018 and FY2019 budget, President Trump proposes to eliminate federal support

for MEP in the FY2020 budget request. In FY2018 and FY2019, Congress provided $140.0

million for MEP. The House-passed level (H.R. 3055) for MEP for FY2020 is $154.0 million.

The Senate has not yet acted.

Table 1. Manufacturing Extension Partnership Program Appropriations, FY2018-

FY2019

(budget authority, in millions of dollars)

FY2019

Enacted

FY2020

Request

FY2020

House

FY2020

Senate

FY2020

Enacted

Manufacturing Extension

Partnership program $140.0 $0.0 $154.0

Source: Consolidated Appropriations Act, 2019 (P.L. 116-6); National Institute of Standards and

Technology/National Technical Information Service Fiscal Year 2020 Budget Submission to Congress, March 2019,

https://www.commerce.gov/sites/default/files/2019-03/fy2020_nist_congressional_budget_justification.pdf , and

H.R. 3055.

Appropriations and Requests FY2003-FY2020

The MEP program has at times enjoyed presidential and congressional support; at other times, it

has been targeted for reductions or elimination. These changes are visible in the history of

presidential budget requests and congressional actions on MEP appropriations. Figure 2

illustrates funding levels for the NIST MEP program, both requested and enacted appropriations,

for FY2003-FY2019; Table 2 provides the requested and enacted appropriations amounts.

While President George W. Bush’s annual budget requests generally called for substantial

reductions in support for MEP, Congress appropriated generally steady funding except for

FY2004 and FY2008. In FY2004, MEP funding was cut to $38.6 million, down 62.6% from its

FY2003 level of $105.9 million. However, Congress restored MEP funding in FY2005,

appropriating somewhat more than it had in FY2003.

In FY2008, MEP funding was cut to $89.6 million, down 14.4% from its FY2007 level of $104.7

million. For FY2009, President Bush’s final budget proposed to end federal funding for MEP,

requesting $4 million to allow for “the orderly change of MEP centers to a self-supporting

basis.”103 Congress opted instead to provide $110.0 million for MEP, an increase of 22.8% above

the FY2008 enacted level.

103 NIST, Fiscal Year 2009 Budget Submission to Congress, http://www.osec.doc.gov/bmi/budget/09CBJ/

NISTand%20NTIS%20FY2009%20Congressional%20Justification.pdf.



Under President Obama, MEP budget requests equaled or exceeded actual appropriations. In

FY2010, President Obama requested and received $124.7 million for MEP. For the rest of the

Obama Administration, MEP budget requests proposed higher funding for MEP than was enacted.

President Trump proposed the elimination of federal support for the MEP centers in FY2018,

requesting $6.0 million “for the orderly wind down” of the program. Congress appropriated

$140.0 million for MEP for FY2018. In his FY2019 and FY2020 budgets, President Trump also

proposed the elimination of federal support for the MEP centers, requesting no funding for the

program.

Between FY2003 and FY2019, MEP enacted appropriations grew at a compound annual growth

rate (CAGR) of approximately 1.8% per year, slightly below inflation.104

Figure 2. Manufacturing Extension Partnership Program Funding

Requested Appropriations, FY2003-2020; Enacted Appropriations, FY2003-FY2019

(in millions of current dollars)

Source: Department of Commerce and NIST budget documents, FY2003-FY2019; P.L. 115-141.

Table 2. Requested and Enacted Appropriations for the MEP Program

(Request, FY2003-FY2019; Enacted, FY2003-FY2018; in millions of current dollars)

104 The GDP (Chained) Price Index, a measure used by the Office of Management and Budget to adjust for inflation in

research and development, grew at 2.0% CAGR during this period; the Consumer Price Index for the period grew at

2.1% CAGR.

Fiscal Year Request Enacted

2003a $ 12.9 $ 105.9

2004b 12.6 38.6

2005c 39.2 107.5



Source: Department of Commerce and NIST budget documents, FY2003-FY2020.

Notes:

a. Enacted levels reflect an across-the-board rescission enacted in P.L. 108-7.

b. Enacted levels reflect across-the-board rescissions enacted in the FY2004 Consolidated Appropriations Act,

P.L. 108-199, and NIST’s share of the Department of Commerce’s unobligated balances rescission.

c. Enacted levels reflect across-the-board rescissions enacted in P.L. 108-447, FY2005 Consolidated

Appropriations Act ($9.5 million). Does not reflect unobligated balances rescission of $3.9 million.

d. Enacted levels reflect across-the-board rescissions enacted in P.L. 109-108, FY2006 Science, State, Justice,

and Commerce Appropriations Act and in P.L. 109-148, FY2006 Defense Appropriations Act.

e. Enacted levels include 0.2% across-the-board rescission.

f. Enacted levels reflect the 1.877% rescission, 0.2% rescission, and the 5% sequester applied to 2013

annualized CR level.

Use of MEP Appropriations for Center Awards

In response to direction from Congress,105 GAO investigated the extent to which the MEP

program achieves administrative efficiencies. In its March 2014 report, GAO found that of the

$608 million spent on the MEP program from FY2009 to FY2013, about $495 million (81.4%)

went to center awards. The balance was spent on contracts, staff, agency-wide overhead charges,

and other items, some of which NIST considered direct support and some of which NIST

considered administrative spending. According to GAO, NIST estimated that more than 88.5% of

federal MEP program spending in FY2013 was for direct support, and the remainder (11.5%) was

for administration.106

105 Explanatory Statement, Consolidated and Further Continuing Appropriations Act, 2013, Congressional Record,

March 11, 2013, p. 1301.

106 Government Accountability Office, Most Federal Spending Directly Supports Work with Manufacturers, but

Distribution Could Be Improved, GAO-14-317, March 2014.

2006d 46.8 104.6

2007 46.3 104.7

2008 46.3 89.6

2009 4.0 110.0

2010 124.7 124.7

2011e 129.7 128.4

2012 142.6 128.4

2013f 128.0 123.0

2014 153.1 128.0

2015 141.0 130.0

2016 141.0 130.0

2017 142.0 130.0

2018 6.0 140.0

2019 0.0 140.0

2020 0.0



The NIST FY2019 spending plan anticipated the following allocation of MEP FY2019

appropriations ($140.0 million), carry over funding from FY2018 ($6.8 million), and funding

from other agencies ($2.8 million):

$120.0 million for support of MEP centers,

$4.5 million for strategic competitions (e.g., the Competitive Awards Program),

$7.1 million for contracts (e.g., marketing, communications, center

transformation),

$9.8 million for NIST MEP labor, and

$8.2 million for NIST and program overhead.

Appropriate Role of the Federal Government

Continuing financial support for the MEP program is part of a larger ongoing debate among

federal policymakers about the appropriate role of the federal government in providing assistance

to U.S. industry. The MEP program has, at times as it is now, been included in discussions

surrounding termination of federal programs that provide direct support for industry. Proponents

assert that SMMs play a central role in the U.S. economy and that the MEP system provides

information and assistance not otherwise available to SMMs. Some opponents have asserted that

such services are available from other sources and that MEP inappropriately shifts a portion of the

costs of these services to taxpayers. NIST MEP notes that an independent survey of MEP clients

provides evidence that MEP activities bring positive returns to the U.S. Treasury.

Proponents of the program stress that no direct funding is available to companies. Some

opponents assert that activities such as those performed by the MEP centers are a state

responsibility and that the federal role should have ended as the original legislation envisioned.

In addition, some have questioned whether federal support for the MEP centers should continue

to be provided indefinitely.107 As originally expressed in statute, MEP centers were to receive no

federal funding after their fifth year of operation, instead deriving necessary revenues from state

and local governments as well as from the companies utilizing the centers’ services. In 1998,

Congress lifted the prohibition on funding after the fifth year and allowed NIST MEP to provide

up to one-third of center costs after their sixth year of operation indefinitely. More recently,

Congress has enacted legislation that allows for federal MEP funding to support up to 50% of a

center’s costs indefinitely. The debate over whether the federal government should continue to

provide financial support to the centers indefinitely and, if so, at what level, may be revisited by

Congress, especially in light of the Trump Administration’s proposal to defund the MEP program

in FY2019.

These and other issues may be debated as Congress continues to make appropriation decisions

relating to manufacturing extension as it pertains to the role of the federal government in

facilitating research and technological advancement.

107 Note: In this usage, “indefinitely” refers to the MEP centers in general, not to a specific center. Under ACIA, each

MEP center must be competed after 10 years of continuous funding.



Appendix A. Hollings Manufacturing Extension

Partnership Centers

Table A-1. Hollings Manufacturing Extension Partnership Centers

State Center Name, Address, and Website

Alabama Alabama Technology Network

135 South Union Street, Suite 441, Montgomery, AL 36130

http://www.atn.org/

Alaska University of Alaska Anchorage

3211 Providence Drive, BOC Ste. 199, Anchorage, AK 99508

www.uaa.alaska.edu/academics/business-enterprise-institute

Arizona RevAZ

333 N. Central Avenue, Suite 1900, Phoenix, AZ 85004

http://www.revaz.org

Arkansas Arkansas Manufacturing Solutions (AEDC Manufacturing Solutions)

900 West Capitol Avenue, Suite 400, Little Rock, AR 72201

http://www.mfgsolutions.org

California California Manufacturing Technology Consulting

690 Knox Street, Suite 200, Torrance, CA 90502

http://www.cmtc.com/

Colorado Manufacturer’s Edge

Manufacturer's Edge C/O REO, 5505 Airport Boulevard, Boulder, CO 80301

http://www.manufacturersedge.com

Connecticut Connecticut State Technology Extension Program

1090 Elm Street, Suite 202, Rocky Hill, CT 06067

http://www.connstep.org/

Delaware Delaware Manufacturing Extension Partnership

400 Stanton-Christiana Road, Suite A-158, Newark, DE 19713

http://www.demep.org/

Florida FloridaMakes

800 N. Magnolia Avenue, Suite 1850, Orlando, 32803

http://www.floridamakes.com

Georgia Georgia Manufacturing Extension Partnership

Georgia Tech, 75 Fifth Street, NW Suite 300, Atlanta, GA 30308

http://www.gamep.org/

Hawaii INNOVATE Hawaii

2800 Woodlawn Drive, Suite 100, Honolulu, HI 96822

http://www.innovatehawaii.org

Idaho TechHelp

Boise State University, 1910 University Drive, Boise, ID 83725

http://www.techhelp.org

Illinois Illinois Manufacturing Excellence Center

428 Jobst Hall, 1501 W. Bradley Avenue, Bradley University, Peoria, IL 61625

http://www.imec.org

Indiana Purdue Manufacturing Extension Partnership

8628 E. 116th Street, Suite 200, Fishers, IN 46038

http://www.mep.purdue.edu




Iowa Iowa Center for Industrial Research and Service

Economic Development Core Facility, 1805 Collaboration Space, Suite 2300, Ames, IA 50010

http://www.ciras.iastate.edu

Kansas Mid-America Manufacturing Technology Center

10550 Barkley Street, Suite 116, Overland Park, KS 66212

http://www.mamtc.com

Kentucky Advantage Kentucky Alliance

2413 Nashville Road, B8, Suite 310, WKU Center for Research and Development, Bowling

Green, KY 42101

http://www.advantageky.org

Louisiana Manufacturing Extension Partnership of Louisiana

537 Cajundome Boulevard, Suite 132, Lafayette, LA 70506

http://www.mepol.org

Maine Maine Manufacturing Extension Partnership

87 Winthrop Street, Augusta, ME 04330

http://www.mainemep.org/

Maryland Maryland MEP

8894 Stanford Boulevard, Suite 304, Columbia, MD 21045

http://www.mdmep.org

Massachusetts Massachusetts Manufacturing Extension Partnership

100 Grove Street, Suite 108, Worcester, MA 01605

http://www.massmep.org/

Michigan Michigan Manufacturing Technology Center

45501 Helm Street, Plymouth, MI 48170

http://www.the-center.org

Minnesota Enterprise Minnesota

310 4th Avenue S., Suite 7050, Minneapolis, MN 55415

http://www.enterpriseminnesota.org

Mississippi Mississippi Manufacturers Association-Manufacturing Extension Partnership (MMA-MEP)

720 North President Street, Jackson, MS 39202

http://www.mma-web.org/mep

Missouri Missouri Enterprise

900 Innovation Drive, Suite 300, Rolla, MO 65401

http://www.missourienterprise.org

Montana Montana Manufacturing Extension Center PO Box 174255, Montana State University, 2310 University Way Building 2, Suite 1, Bozeman,

MT 59717

http://www.montana.edu/mmec

Nebraska Nebraska Manufacturing Extension Partnership

University of Nebraska-Lincoln, 301 Agricultural Hall

3550 East Campus Loop South, Lincoln, NE 68583

http://nemep.unl.edu

Nevada Nevada Industry Excellence

UNR 1644 N. Virginia Street, 204 Ross Hall Mailstop 325, Reno, NV 89557

http://www.nevadaie.com

New Hampshire New Hampshire Manufacturing Extension Partnership

172 Pembroke Road, Concord, NH 03301

http://www.nhmep.org/




New Jersey New Jersey Manufacturing Extension Program

2 Ridgedale Avenue, Suite 305, Cedar Knolls, NJ 07927

http://www.njmep.org

New Mexico New Mexico Manufacturing Extension Partnership

4501 Indian School Road, NE, Suite 202, Albuquerque, NM 87110

http://www.newmexicomep.org

New York New York Manufacturing Extension Partnership

625 Broadway, ESD, Division of Science, Technology & Innovation (NYSTAR), Albany, NY

12245

http://www.esd.ny.gov/nystar/nymep.asp

North Carolina North Carolina Manufacturing Extension Partnership

1005 Capability Drive, Research II Building., Suite 200, Raleigh, NC 27695

http://www.ncmep.org

North Dakota Impact Dakota

1929 North Washington Street, Suite M, Bismarck, ND 58501

http://www.impactdakota.com

Ohio Ohio Manufacturing Extension Partnership

77 South High Street, 28th Floor, Columbus, OH 43215

http://www.development.ohio.gov/bs/bs_mep.htm

Oklahoma Oklahoma Manufacturing Alliance

525 South Main Street, Suite 210, Tulsa, OK 74103

http://www.okalliance.com/

Oregon Oregon Manufacturing Extension Partnership

7650 SW Beveland Street, Suite 170, Portland, OR 97223

http://www.omep.org

Pennsylvania Pennsylvania Manufacturing Extension Partnership

One College Avenue, DIF 32, Williamsport, PA 17701

http://www.pamade.org/network

Puerto Rico Puerto Rico Manufacturing Extension Inc.

#268 Muñoz Rivera Avenue, World Plaza Building, Suite 1002, Hato Rey, PR 00918

http://www.primexpr.org

Rhode Island Polaris MEP

75 Lower College Road, Carlotti Administration Building, Room 212, Kingston, RI 02881

http://www.polarismep.org

South Carolina South Carolina Manufacturing Extension Partnership 250 Berryhill Road, Suite 512, Columbia, SC 29210

http://www.scmep.org

South Dakota South Dakota Manufacturing and Technology Solutions

2329 N. Career Avenue, Suite 106, Sioux Falls, SD 57107

http://www.sdmanufacturing.com

Tennessee Tennessee Manufacturing Extension Partnership

193 Polk Avenue, Ste. C, Univ. of Tennessee Center for Industrial Services, Nashville, TN

37210

http://www.cis.tennessee.edu/

Texas TMAC

9390 Research Boulevard, Austin, TX 78759

http://www.tmac.org/




Utah University of Utah – MEP Center

100 South 1495 East MEK 1121, Salt Lake, UT 84112

http://www.mep.utah.edu

Vermont Vermont Manufacturing Extension Center

1540 VT Rt. 66, Suite 103, Randolph, VT 05060

http://www.vmec.org/

Virginia Genedge Alliance

32 Bridge Street, Suite 200, Martinsville, VA 24112

http://www.genedge.org

Washington Impact Washington

3303 Monte Villa Parkway, Suite 340, Bothell, WA 98021

http://www.impactwashington.org

West Virginia West Virginia Manufacturing Extension Partnership

886 Chestnut Ridge Road, 2nd Floor, Morgantown, WV 26506

http://www.wvmep.com

Wisconsin Wisconsin Center for Manufacturing and Productivity

2601 Crossroads Drive, Suite 145, Madison, WI 53718

http://www.wicmp.org

Wyoming Manufacturing-Works

Department 3362, 1000 East University Avenue, Laramie, WY 82071

http://www.manufacturing-works.com/

Source: Email from NIST to CRS, September 13, 2017.



Appendix B. Center Funding After System-Wide

Competition

Table B-1. NIST First-Year Center Funding Following System-Wide Recompetition

(by state, in current dollars)

State First Year NIST Funding Round

Alabama $1,780,800 3

Alaska $500,000 2

Arizona 1,000,000 n/a

Arkansas 971,218 3

California 14,046,449 3

Colorado 1,668,359 1

Connecticut 1,476,247 1

Delaware $500,000 4

Florida 3,500,000 n/a

Georgia 2,693,482 3

Hawaii 500,000 4

Idaho 640,236 2

Illinois 5,029,910 2

Indiana 2,758,688 1

Iowa 1,859,206 4

Kansas 1,864,950 4

Kentucky $600,000 n/a

Louisiana 1,197,546 3

Maine 863,522 4

Maryland 1,000,000 n/a

Massachusetts 2,467,879 3

Michigan 4,299,175 1

Minnesota 2,653,649 2

Mississippi 1,003,782 4

Missouri 2,207,873 3

Montana 512,000 3

Nebraska 600,000 n/a

Nevada 756,001 4

New Hampshire 628,176 1

New Jersey 2,814,432 2

New Mexico 1,360,802 4



State First Year NIST Funding Round

New York 5,985,194 2

North Carolina 3,036,183 1

North Dakota 500,000 4

Ohio 5,246,822 3

Oklahoma 1,309,080 2

Oregon 1,792,029 1

Pennsylvania 5,280,586 3

Puerto Rico 643,133 3

Rhode Island 750,000 n/a

South Carolina 2,268,003 4

South Dakota 500,000 n/a

Tennessee 1,976,348 1

Texas 6,700,881 1

Utah 1,147,573 3

Vermont 500,000 3

Virginia 1,722,571 1

Washington 2,534,872 2

West Virginia 500,000 2

Wisconsin 3,250,792 2

Wyoming 500,000 4

Source: NIST, “NIST Awards $26 Million to Support Manufacturing in 10 States,” press release, February 24,

2015, http://www.nist.gov/mep/awards-support-manufacturing.cfm; NIST, “New Funding Brings New

Opportunities for Manufacturers in Nine States,” press release, September 21, 2015, http://www.nist.gov/mep/

new-funding-brings-new-opportunities-for-manufacturers-in-nine-states.cfm; NIST, “New Funding Awarded to

Support Wisconsin Manufacturers,” press release, November 13, 2015, http://www.nist.gov/mep/new-funding-

awarded-to-support-wisconsin-manufacturers.cfm; email from NIST to CRS, September 13, 2017.

Note: “n/a” indicates that the centers had been competed just prior to the start of the recompetition, and thus

were not competed in rounds 1-4 of the recompetition.

Author Information

John F. Sargent Jr.

Specialist in Science and Technology Policy


Congressional Research Service R44308 · VERSION 16 · UPDATED 36

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